International Trade
Which economic principle advises that a country should specialize in producing goods it can make most efficiently and import goods that other countries produce more effectively?
Comparative advantage
Which form of investment includes assets like company stock or bonds but does not involve direct control over the management of the company?
Portfolio investment
What is the exchange-rate policy called when a government keeps its currency at a specific value relative to another currency or commodity?
Fixed exchange rate
What policy approach, commonly used by developing countries from the 1930s to the 1980s, aimed to reduce imports and promote domestic manufacturing through trade barriers and subsidies?
Import-substituting industrialization (ISI)
What trade theory explains a country's comparative advantage based on its factor endowments, such as land, labor, capital, and human capital?
Heckscher-Ohlin trade theory
What term describes policies aimed at reducing consumption through measures like cutting government spending, raising taxes, and restricting wages?
Austerity
What is the term for a government tool used to influence macroeconomic conditions like unemployment, inflation, and economic growth, often by adjusting interest rates or exchange rates?
Monetary policy
What is the term for a market structure in which an industry is dominated by a small number of large firms?
Oligopoly
What is it called when a government imposes tariffs, quotas, or regulations on imports to protect domestic industries from foreign competition?
Protectionism
What term describes a severe downturn in the business cycle, marked by significant declines in economic activity, production, and investment, along with high unemployment and a severe contraction of credit?
Depression
What was the historical system called where international exchange rates were based on a fixed price of gold?
Gold standard
What policy approach, first adopted by several East Asian countries in the mid-1960s, aims to boost manufacturing for export through subsidies and export incentives?
Export-oriented industrialization (EOI)
What organization, established in 1995, replaced the General Agreement on Tariffs and Trade (GATT) as the primary institution overseeing international trade relations?
The World Trade Organization (WTO)
What international economic institution, established in 1944, focuses on managing international monetary relations and addressing issues like debt and currency crises?
International Monetary Fund (IMF)
What is it called when a country purposely causes its currency to depreciate to make its exports cheaper and more competitive in the global market?
Currency manipulation
What is the term for associations of commodity producers that restrict global supply to raise the price of their goods?
Commodity cartels
What term describes obstacles to imports that do not involve tariffs but include quotas, regulations favoring domestic products, and laws like "Buy American"?
Non-tariff barriers to trade
What type of investment involves acquiring or establishing a facility in a foreign country, with the investor maintaining managerial control over the operation?
Foreign Direct Investment (FDI)
What is the exchange-rate policy called when a government allows its currency to be traded on the open market without direct control or intervention?
Floating exchange rate
What is the term for financial aid provided to developing countries at below-market interest rates, often with favorable terms to support economic development?
Concessional finance